Alumina Limited breaks dividend drought

Alumina Limited has broken a three-year dividend drought after posting a slightly better than expected underlying profit of $US91.1 million ($117 million).

Shareholders in the company, which operates a joint venture with American aluminium giant Alcoa, have not been rewarded for their patience since February 2012.

However, on Thursday, they were given a US1.6¢ dividend per share.

The dividend was below the US2¢ dividend that analysts surveyed by Bloomberg had expected, and well below the US4¢ dividend predicted by JPMorgan.

The payout comes after a much brighter year for aluminium producers, which have seen aluminium stockpiles decline and bauxite prices firm.

Alumina also thrives when the Australian currency is weak against the US dollar.

The company's chief executive, Peter Wasow, heralded the return to dividends.

"With a strong balance sheet, reduced capital requirements going forward and an improved business outlook, we are pleased to resume paying dividends," he said.

The $US91.1 million underlying profit became a statutory loss of $US98.8 million after asset impairments worth $US189.4 million were accounted for.

The impairments relate to the closure of the Point Henry aluminium smelter near Geelong and the Jamalco operation in Jamaica.

Ironically, Alumina Limited said the removal of the former Gillard government's carbon tax had made the company's power costs rise during 2014.

The carbon tax was opposed by many industrial groups for its potential to raise energy costs and, as a result, many businesses, including Alcoa and Alumina Limited, were given compensation in the form of free carbon credits.

Alumina Limited said on Thursday that the removal of the carbon tax, and the subsequent removal of the carbon credits, had resulted in its power costs rising during the past year once currency movements were extracted.

"Excluding the currency impact, energy costs were higher than 2013 levels mainly due to increased prices and the loss of carbon tax credits in Australia," the company said.

Alcoa and Alumina Limited remain determined to try and sell the Anglesea coal mine near Victoria's Great Ocean Road, despite community opposition to the mine.

The mine was connected to the electricity grid in August.